City round-up: Johnson Service Group; Surface Transforms
Textile services provider Johnson Service Group will tell its Annual General Meeting today group revenue in the first three months of the year increased by 6.1% to £121.4 million (2024: £114.4 million). Organic revenue growth in the same period was 2.2% (HORECA: 2.2%; Workwear: 2.3%).
The company will also says that bank debt increased from £68.6 million at December 2024 to £84.5 million at the end of March 2025 and is expected to peak mid-year, reflective of the timing of dividend payments, share buybacks, working capital movements and capital expenditure. Bank debt at June 2025 is expected to be approximately £100.0 million before reducing to a similar level to March 2025 by December 2025, assuming a total share buyback of £30.0 million is completed by that date.
The company has returned £6.3 million to Shareholders under the £15.0 million share buyback programme announced on 5 March 2025.
The business is still on the hunt for accretive acquisitions and wants to maintain a progressive dividend policy in order to distribute surplus cash to Shareholders.
JSG hopes to move to the Main Market and will make a further announcement on or before 11 June 2025.
The AGM statement will also say: “We remain confident in the prospects of the Group and our ability to manage the potential economic challenges that may arise in 2025 and beyond.
“We have a strong, well-invested business and a strong balance sheet to support future investment opportunities as they arise.
“Given the encouraging start to the year, which was in line with our expectations, the Board remains confident about delivering another year of progress in 2025 and is on track for an Adjusted Operating Profit margin improvement to at least 14% in 2026.”
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Surface Transforms
Knowsley-based specialist brakes manufacturer, Surface Transforms, has made the first payment under its share incentive plan (SIP), which was agreed at the company’s June 2023 annual general meeting.
The scheme applies to 37 staff who have received a total of 21,462,860 shares of 1p each.
The SIP was established to incentivise employees through the acquisition, or issue, of ordinary shares, with individual contributions ranging between £10 and £150 per month, together with a discretionary award of bonus shares – known as matching shares in the SIP agreement – up to a 2:1 basis with the paid-for ordinary shares.
The paid-for SIP shares and discretionary award of matching ordinary shares, on a 1:1 basis have been acquired at an average price of 0.3206 pence per ordinary share.
Accordingly, employees paid in aggregate £34,405 which was matched by the company with respect to the discretionary award.
Among the 37 staff are three individuals who are Persons Discharging Managerial Responsibilities (PDMRs).
They are CEO Kevin Johnson, who received 1,122,894 SIP shares, giving him a total shareholding post issue of SIP shares, of 4,764,202 shares. CFO Isabelle Maddock, who is leaving the company on June 30, 2025, received 748,596 SIP shares, taking her total holding to 1,212,359, while COO Stephen Easton also received 748,596 SIP shares, giving him a total of 2,248,596.
The board confirms it has launched the second accumulation period under the SIP.
A month ago the company issued a first quarter trading update which said patchy production problems persist, although it retains the support of key customers in its bid to remedy these ongoing issues.
This support includes total cash advances, to date, of more than £8m for working capital purposes, increased disc pricing and funded external manufacturing expertise.
In addition, strategic discussions with certain key customers regarding longer term arrangements were at an advanced stage, the company revealed.
Shares in Surface Transforms slumped by more than 30% in February following a stock market note revealing that operational problems had worsened.
At the time of the first quarter update, shares opened the morning trading priced at 0.28p. They closed last night (April 30) at 0.38p.
